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Slump in US Market ..

Feb. 20 (Bloomberg) -- Japanese stocks fell on concern rising bad-loan costs will weigh on profits at financial companies, outweighing a gain by resource shares after oil surged.

Mizuho Financial Group Inc., Japan’s No. 2 listed bank, slid 1.5 percent after Goldman Sachs Group Inc. said rising credit- card defaults may chop U.S. issuers’ earnings. Bridgestone Corp., the world’s biggest tiremaker, was poised to slump after saying profit will fall 71 percent this year. Inpex Corp., Japan’s largest oil explorer, climbed 2.3 percent after crude soared the most in seven weeks.

The Nikkei 225 Stock Average declined 22.09, or 0.3 percent, to 7,535.56 as of 9:08 a.m. in Tokyo. The broader Topix index fell 1.46, or 0.2 percent, to 750.13. In New York, the Dow Jones Industrial Average dropped to the lowest close since October 2002, while the Standard & Poor’s 500 Financials Index retreated to the lowest level since January 1995.

“Though stocks here will unavoidably fall after the slump in the U.S. market, the drop won’t be very big,” Soichiro Monji, chief strategist at Tokyo-based Daiwa SB Investments Ltd., which manages $53 billion, said in an interview with Bloomberg Television. “Resource shares will be resilient after the jump in oil prices.”

The Nikkei has lost 15 percent this year as government and central bank measures to revive growth failed to restore confidence in the financial system and quell concern that the global recession will deepen.

Credit-card defaults may peak at 11 percent of loans by yearend, Goldman Sachs analyst Brian Foran said in an e-mail, cutting his 2009 earnings estimate for card issuer American Express Co. by almost 40 percent. Earlier this month, Fitch Ratings said loan failures climbed to 7.5 percent, the highest level since 2005.

Crude oil for March delivery soared 14 percent to $39.48 a barrel in New York after a U.S. government report showed an unexpected decline in inventories. A measure of six primary metals traded in London rose 1.5 percent.

To contact the reporter for this story: Masaki Kondo in Tokyo at [email protected].